Financial Crime World

Montserrat National Risk Assessment 2023: A Comprehensive Review of Money Laundering and Terrorist Financing Risks

Montserrat, a small economy with a limited financial system, has published its National Risk Assessment (NRA) for 2023 to combat money laundering (ML), terrorist financing (TF), and proliferation financing (PF). The NRA is the result of a five-year exercise that involved extensive stakeholder engagement and technical assistance from international partners.

Context and Materiality

As a small economy, Montserrat’s context and materiality of ML, TF, and PF risks are considered low. However, the jurisdiction recognizes the importance of adhering to stringent international standards in anti-money laundering (AML) and combating the financing of terrorism (CFT).

Risk-Based Approach

The NRA was conducted using a structured risk-based approach, incorporating quantitative and qualitative assessments. The process involved establishing stakeholder working committees comprised of representatives from key governmental and private sector institutions.

Key Findings

  • Montserrat’s ML, TF, and PF risks are considered low due to its small economy and limited financial system.
  • However, the jurisdiction recognizes the importance of adhering to stringent international standards in AML/CFT.
  • The NRA identifies areas for improvement, including:
    • Enhanced customer due diligence
    • Improved suspicious transaction reporting
    • Strengthened regulations governing designated non-financial businesses and professions (DNFBPs)
  • Key sectors, such as banking, insurance, and DNFBPs, are vulnerable to ML and TF risks.

Recommendations

To address the identified deficiencies and implement appropriate measures to mitigate risks, Montserrat is recommended to:

  • Strengthen regulations governing DNFBPs
  • Enhance customer due diligence practices
  • Improve suspicious transaction reporting
  • Develop a National Strategy and detailed action plan to address identified deficiencies and implement appropriate measures to mitigate risks
  • Continue international cooperation and information sharing to prevent and combat financial crimes

Next Steps

Montserrat will use the NRA to develop a National Strategy and detailed action plan to address identified deficiencies and implement appropriate measures to mitigate risks. The jurisdiction’s efforts will contribute to the global fight against financial crime and enhance international cooperation to protect the integrity of the financial system.

Conclusion

The Montserrat National Risk Assessment 2023 is a significant achievement, demonstrating the jurisdiction’s commitment to combating ML, TF, and PF. By implementing the recommendations outlined in this report, Montserrat can further strengthen its AML/CFT regime and enhance international cooperation to prevent and combat financial crimes.